States slow to use funds for road projects

Even as the Centre has released around Rs 240 crore (Rs 2.40 billion) from the central road fund to states for road upgradation during the first two months of 2003-04, state governments have been lax at utilising this money.

Of the 27 proposals sent by the states between April to June this fiscal, 10 proposals have been held up since the concerned states have not yet produced utilisation certificates with regard to previous disbursements to them from the central road fund.

"The slow pace of utilisation of money accruing to state governments from fuel cess inflows, for upgradation of state roads is worrying," a union ministry of road transport and highways official said.

The states that have their proposals pending include Andhra Pradesh, Bihar, Jammu and Kashmir, Karnataka and Punjab.

As per guidelines, upgradation of state roads funded from the central road fund, entailing money from the cess on auto fuel, is required to be completed within 24 months of grant of funds.

States have to send detailed estimates, following which the ministry sanctions the projects.

The fund share for states is fixed by considering the total fuel consumption in the state, which gets a 60 per cent weightage and the total area of the state at a 40 per cent weightage.

Release of funds to states from the central road fund is linked to utilisation certificates to be furnished by them with respect to funds released previously.

Prior to levying user charges in the roads sector, a meagre sum of around Rs 25 crore (Rs 250 million) was being collected by way of tax on automobile fuel for improvement of roads.

The levy of a one-rupee cess per litre of petrol (since June 1998) and one rupee cess per litre of diesel, revenue from which accrued to the dedicated non-lapsable central road fund, promised to change the condition of state roads if project implementation is done in right earnest, the official said.

The ministry of roads is already implementing the Rs 58,000 crore (Rs 580 billion) National Highways Development Project, which is partly financed by the cess money.

Of the total money accruing from the levies on fuel, 50 per cent of the cess money from diesel goes for the development of rural roads.

Of the balance 50 per cent cess from diesel and the entire cess on petrol, 57.5 per cent goes for development of national highways under the NHDP, 12.5 per cent goes for construction of railway crossings and road over bridges, and the remaining 30 per cent goes to state governments for upgradation of state roads.

A 50 paise additional cess on diesel has been added in 2003-04, which goes entirely to the NHDP.

Allocation to states from the central road fund has been Rs 1,192 crore (Rs 11.92 billion) and Rs 5,590 crore (Rs 55.90 billion) during 1999-2000 and 2000-01 respectively while Rs 5,962 crore (Rs 59.62 billion) was allocated to states in 2002-03.

Tardy progress